Charlie Mayfield is on a roll. One minute the John Lewis chairman is announcing record profits for his first year in charge and the biggest staff bonus for a decade - ten weeks' pay; the next, he is visiting a new Waitrose store in North London and an elderly shopper asks an assistant: “Who's that gorgeous man? Very sexy!” Mr Mayfield laughs, blushes and heads off to the cheese counter.

These are heady times for the John Lewis Partnership, the employee-owned group that is leaving much of the high street floundering in its wake. Legions of loyal shoppers across Middle England flock to the group's department stores for flatscreen televisions and digital photo frames, and Waitrose, its supermarket chain, is poaching customers from Tesco and wrestling the high-quality food crown away from Marks & Spencer. “It's been a good year,” Mr Mayfield says.

Things have not always been as clear-cut. John Lewis was not a happy place to be in 1999, when the company was struggling and reports of a possible demutualisation and £100,000 windfalls for staff sparked a debate among the workforce about the merits of going public.

Sir Stuart Hampson, Mr Mayfield's predecessor, called the media coverage the low point of his career, and it took time for John Lewis to feel confident enough to try to rebuild some of the bridges.

Mr Mayfield, a former Scots Guard, believes that the group is ready to go on a charge. Last year he announced plans to double the size of the partnership within ten years to one generating £12 billion of annual sales. He wants the business to start talking about just how good it is - and how successful it could be. At John Lewis's annual results presentation two weeks ago, he made a point of showing how sales at Waitrose had grown by 75 per cent in six years. Profits across the group are 160 per cent higher.

Mr Mayfield says: “I wanted to show that, going forward, the growth we are talking about is not very different to what we have been achieving, and it's a really important point people need to recognise. I want people internally to realise where we have come from.

“In some ways, the last seven, eight, nine years have been an awakening for the partnership. We started to look outside and become more open to the outside world and all of that has had a galvanising effect on the business. We have been able to measure ourselves against the competition, not to emulate them, but to see where we could do better and realise where we are very, very good. By focusing more externally, we have grown more confident about what we can achieve, how good our people are and so have become more ambitious. There has been a quiet revolution. We've modernised and we can be a really powerful force in UK retailing.”

Mr Mayfield's marketing background - he promoted Lucozade at SmithKline Beecham - is coming to the fore. John Lewis embarked on one of its biggest advertising campaigns for years before Christmas. He is also encouraging a far closer working relationship between the John Lewis and Waitrose businesses. Ten more John Lewis department stores are planned, which would take the total to 36. Waitrose has 188 stores and is poised to open some in Dubai under a franchise deal. Gradually, the group is beginning to flex its muscles.

Mr Mayfield insists that, despite the changes, the cornerstone of the success remains the democratic, profit-sharing partnership model dreamt up by Spedan Lewis in 1920. The group's 69,000 staff are “partners” and earn a percentage of the annual profits. Of the £380million pre-tax profit reported by John Lewis for 2007, £181million went to the workforce in bonuses, equivalent to 20 per cent of their salaries. John Lewis runs four of its own holiday parks and operates a partnership council, made up of 80 elected employees who can vote an executive out of the boardroom.

Almost a year ago to the day, one of Mr Mayfield's first tasks on taking over as chairman was to swear an oath promising to ensure that the partnership “retains its distinctive character and democratic vitality”. The structure makes a takeover all but impossible. In the past all this has made John Lewis seem antiquated.However, Mr Mayfield insists that the extra motivation that staff have to do well is one of the main reasons why the partnership is outperforming its competition. He adds that although the global financial markets are in meltdown, John Lewis is not only challenging companies in terms of sales but also in “equitable” behaviour.

He says: “The thing I feel passionately about is that I want a successful business but also, by being successful, I want to challenge the conventional wisdom about what creates corporate success.

“There are challenges to any company adopting the partnership model lock, stock and barrel, but I think there are lots of aspects and elements of it that are relevant in today's business world and in the way society is beginning to feel.

“If you look at the credit crunch, we are all victims of what appear to be fairly serious breakdowns in the way those markets were regulating themselves and the way that people were behaving in those markets, largely for their own interests rather than interests of a wider community.

“One of those things uniting society is a sense of fairness, and the partnership has at its core the principle of fairness. I think it is in tune with what quite a lot of people would like to see happening.” He refuses to be drawn on where Marks & Spencer fits into this concept, given the corporate governance dispute that followed the announcement of Sir Stuart Rose's forthcoming elevation to executive chairman, the position that Mr Mayfield holds at the partnership. He simply notes that the companies have different structures.

Sales have begun to fall off at John Lewis in recent weeks, with homeware sales at their weakest levels for four years, yet Mr Mayfield is confident that the company will continue to cope better than most of its rivals.

He says: “We will trade through it. We'll focus on making sure availability is top notch, the product ranges are inspirational and keep on focusing on what we do. We have some fantastic operators in this business and they've been through this before.”

C.V.

Born: December 25, 1966

Education: Radley College, Sandhurst, Cranfield School of Management

Career: Began career as an officer in the Army and worked for SmithKline Beecham and McKinsey before joining the John Lewis Partnership in 2000 as head of business development. Appointed managing director, John Lewis, in 2005 and chairman of the John Lewis Partnership in 2007

Family: Married, two daughters, one son

Other interests: running, walking, skiing, sailing

Q&A

If you could change one thing in the financial and commercial environment, what would it be?

Greater encouragement for employee-owned enterprises through tax and investment incentives

Who is or was your mentor?

I wouldn't say I have a single mentor. I have worked for and with several people who have taught me a lot and continue to do so

Does money motivate you?

It's important but not the thing that gets me up in the morning

What is the most important event of your working life?

Taking on the challenge and responsibility of being chairman

What gadget must you have?

Sadly, my BlackBerry

What does leadership mean to you?

To achieve your own goals, you have to focus first on the needs of others. I'm still learning how to do that

Which business person do you most admire?

I wouldn't single out any one person, as I admire more and more business leaders as I come to appreciate the complexities and subtleties

How do you relax?

Playing football on the beach in Brittany with my children and friends as the sun starts to set